Can I lay someone off, only to internally promote someone to their position?
Scenario:
I have a former employee whose performance was subpar. Due to a round of budget cuts, we decided to lay the employee off and eliminate their position. However, a current employee recently approached me and said they would like to be promoted to that position. They have a much better work ethic and would be perfect for the role. Can I lay someone off, only to internally promote someone to their position?
Answer:
This question falls into a gray area where legality and practical risks intersect.
Legal Implications
There is no law explicitly prohibiting the elimination and subsequent reinstatement of a position. Employers may eliminate a role during budget cuts or organizational changes, only to realize later that the position was essential. However, if the position is restored, you must carefully consider why the former employee was not reinstated, as this could raise legal concerns.
Risks
If the former employee becomes aware of the reinstated position, they may perceive the layoff as wrongful termination, particularly if:
There is no documented evidence of their subpar performance.
The layoff appears to have been a pretext for discrimination or retaliation.
The Equal Employment Opportunity Commission (EEOC) flags this practice as risky because it can be interpreted as a disguised discriminatory act. Even without an EEOC claim, the former employee could pursue a costly wrongful termination suit.
Best Practices
To avoid these risks:
Document Performance Issues: Always address and document performance concerns directly. If termination becomes necessary, ensure there is clear evidence to support the decision.
Evaluate the Position’s Necessity: Before reinstating the role, assess whether it aligns with current business needs or if the duties can be distributed across other roles. As a general rule, waiting at least 6 months before reopening a position can help mitigate the perception of unfair or wrongful termination, with 12 months offering a safer buffer.
Consult Your HRBP: Your HR Business Partner can guide you on how to navigate this situation and assess the potential risks. In some cases, we may advise consulting an employment attorney to ensure legal compliance and minimize exposure.
Taking these steps ensures fairness, minimizes legal exposure, and promotes transparency within the organization.